Comedian Jimmy Carr: I've made terrible error over tax

Jimmy Carr Jimmy Carr: No longer involved in the tax scheme

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Comedian Jimmy Carr says he has "made a terrible error of judgement" over using a tax avoidance scheme.

In a statement on his Twitter account, Mr Carr said he was no longer involved in the K2 tax shelter.

Prime Minister David Cameron on Wednesday called Mr Carr's use of the scheme "morally wrong".

But the PM refused to comment on Take That star Gary Barlow's tax affairs - saying it was a different case - after Labour called for his OBE to removed.

The K2 tax scheme used by Mr Carr is a way of lowering the amount of tax paid. It is legal and Mr Carr made clear in his statement it was fully disclosed to HMRC.

In a series of messages on Twitter Mr Carr said: "I appreciate as a comedian, people will expect me to 'make light' of this situation, but I'm not going to in this statement.

"As this is obviously a serious matter. I met with a financial advisor and he said to me 'Do you want to pay less tax? It's totally legal'. I said 'Yes'."

"I now realise I've made a terrible error of judgement.

"Although I've been advised the K2 Tax scheme is entirely legal, and has been fully disclosed to HMRC (Her Majesty's Revenue and Customs).


Do regular taxpayers care whether a comedian pays his tax? Or do they think it a joke that he, and hundreds of others, are given the opportunity to avoid paying it?

The government says it wants to put an end to "contrived" avoidance schemes. It needs the extra tax income after all.

Next year it plans to bring in a new general anti-abuse rule, to stop cunning schemes designed solely to avoid tax.

But accountants are lining up to argue that the line between artificial avoidance and legitimate tax planning is blurred - and the proposals will not end disputes entirely.

Which side of the line is sheltering your family from inheritance tax? And what about tax breaks for investing in small businesses?

Clearly Jimmy Carr's "error of judgement" will not be the punchline to this story.

"I'm no longer involved in it and will in future conduct my financial affairs much more responsibly. Apologies to everyone. Jimmy Carr."

More than 1,000 people, including Mr Carr, are thought to be using the Jersey-based K2 scheme, which is said to be sheltering £168m a year from the Treasury.

Under the K2 scheme, an individual resigns from their company and any salary they subsequently receive is paid to an offshore trust.

Downing Street welcomed Mr Carr's apology.

A spokeswoman said: "HMRC are working hard to investigate the sort of scheme that Jimmy Carr had been reported to be involved in to ensure that they are not aggressively avoiding tax, and, if they are, they are closed down."

She defended Mr Cameron's decision to speak out about an individual's tax affairs - in contravention of normal government practice.

"The prime minister was expressing what probably lots of people felt after reading the coverage," she said.

Business Secretary Vince Cable also backed the prime minister, telling BBC Radio Sheffield he was not prepared to go "through a hit-list of our celebrities" but adding: "We just want people to pay their dues."

The Lib Dem minister said he did not use tax avoidance schemes himself and that, as far he knows, no members of the cabinet did either, saying: "We observe the law... but also try to set an example."


According to The Times newspaper, which first published details of Mr Carr's tax arrangements, the K2 scheme enables members to pay income tax rates as low as 1%.

The prime minister was asked about Mr Carr's arrangement on Wednesday during a visit to Mexico for the G20 summit.

He told ITV News the comedian's tax affairs were "straightforward tax avoidance" and it was unfair on the people who pay to watch the comic perform that he was not paying his taxes in the same way that they did.

"I think some of these schemes - and I think particularly of the Jimmy Carr scheme - I have had time to read about and I just think this is completely wrong.

"People work hard, they pay their taxes, they save up to go to one of his shows. They buy the tickets. He is taking the money from those tickets and he, as far as I can see, is putting all of that into some very dodgy tax avoiding schemes.

Start Quote

I'm not in favour of tax avoidance obviously, but I don't think it is for politicians to lecture people about morality”

End Quote Ed Miliband Labour leader

"That is wrong. There is nothing wrong with people planning their tax affairs to invest in their pension and plan for their retirement - that sort of tax management is fine.

"But some of these schemes we have seen are quite frankly morally wrong. The government is acting by looking at a general anti-avoidance law but we do need to make progress on this.

"It is not fair on hard working people who do the right thing and pay their taxes to see these sorts of scams taking place."

'Take That'

Labour leader Ed Miliband opted not to join in with the chorus of criticism of the 8 Out of 10 Cats star's tax affairs.

He said: "I'm not in favour of tax avoidance obviously, but I don't think it is for politicians to lecture people about morality.

"I think what the politicians need to do is - if the wrong thing is happening - change the law to prevent that tax avoidance happening."

Shadow leader of the House of Commons Angela Eagle turned her fire on Take That star Gary Barlow, who with two bandmates, is facing questions about £26m they are alleged to have invested in a scheme that is facing a legal challenge from HMRC.

The Labour MP said: "The prime minister rushed to the TV studios to condemn the tax avoidance scheme used by Jimmy Carr but he did not take the opportunity to condemn as morally repugnant the tax avoidance scheme used by Conservative supporter Gary Barlow, who's given a whole new meaning to the phrase 'Take That'.

"If it's all so morally repugnant, why has he just been given an OBE in the birthday honours list?

"Why is the prime minister's view of what's dodgy in the tax system so partial? Sir Philip Green has interesting tax arrangements but far from being labelled morally repugnant in a Mexico TV studio, he's got a government review to head up."

Retail magnate Sir Philip has firmly denied avoiding hundreds of millions of pounds in tax by transferring ownership of his Arcadia business, saying that Arcadia was bought by his wife, Lady Green, in 2002 and because she has not lived in the UK for 15 years no tax was due on any dividends that were paid to her.

During a joint press conference with Burmese opposition leader Aung San Suu Kyi Mr Cameron declined to comment on Mr Barlow's tax affairs.

He said he was not "going to give a running commentary on different people's tax affairs", and said he had made "an exception yesterday... it was a particularly egregious example".

Mr Carr, who has satirised "fat cat" bankers, is reported to protect £3.3m a year from tax by channelling cash through the K2 scheme, which is under investigation by HMRC.

The comedian is thought to be one of more than 1,000 beneficiaries who shelter some £168m from the taxman each year using the company.


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  • rate this

    Comment number 1655.

    Jimmy says he sorry. Let's make him sorry and boycott his shows. Who's laughing now!

  • Comment number 1654.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 1653.

    I agree that this is not illegal but, it is wrong and needs to be shutdown.
    I have been relentlessly targetted by HMRC for 12 months over unpaid tax which was THEIR mistake!! I am now having to pay it back over 2 years due to the amount. I have made two complaints about the 'service' I received and have been ignored.
    Just because someone has money does not mean they should be able to avoide tax!

  • rate this

    Comment number 1652.

    You know the country is in trouble when Tories are whingeing about tax-avoidance schemes

  • rate this

    Comment number 1651.

    Personally, I think the thing about Jimmy Carr is that his entire career is built around pompously taking the mick out of everyone else - including bankers. He would have been wise to remember the old saying that people in glass houses shouldn't throw stones!

  • rate this

    Comment number 1650.

    When government is so profligate with the way it spends our money I consider it fair game for anyone to pay as little tax as possible.

  • rate this

    Comment number 1649.

    Morally reprehensible? I don't Blame Carr at all - if i could avoid paying so much tax for the feckless underclass to keep reproducing and keep their kids in booze and fags, then i'd sign up to K2 too!

    DC would have been better off not drawing attention to it - now he's got to do something about his mates and the BILLIONS they've 'legally' stolen from us

  • rate this

    Comment number 1648.

    Ref -
    21 Minutes ago
    "Then I would have continued not to pay tax and sent DC a letter telling him to shut up and mind his own business!"

    crisbian - it is our business ! it is everyone's business, when tax is evaded or even avoided it affects everyone else. It is "legalised theft".

    All tax returns should be open to public scrutiny they are in Sweden, does them no harm.

  • rate this

    Comment number 1647.

    He HAS done something wrong - just like Angus Deyton did!

    You can't make a career out of exposing people's moral or legal issues and then go and make the same 'mistakes' - and get away with it.

    It's a disgrace that the loopholes are there in the first place of course but I hope we don't see this fella on our screens anymore.

  • rate this

    Comment number 1646.

    Is she sorry because he's been found out?

  • rate this

    Comment number 1645.

    If I were in the position of Mr. Carr, I would do the same. I know that I would make use of the money in a more egalitarian and productive manner than to give it to a government, which because of all the loop holes and the confusion of laws and the murkiness of it all, much of it is not used for the purpose it is intended to.

  • rate this

    Comment number 1644.

    People talk about 'Rich peoples Fiddles'.

    So who hasnt had a man round to fix the pipes or do some descorating, and asked 'how much for cash' knowing that what they mean is, if I pay you cash, 'how much discount will you give me', so that both workman and said person avoid tax!

    I think we should focus on illegal tax avoidance, and employ as many very sharp tax inspectors to Police it as we can!

  • rate this

    Comment number 1643.

    You say that we would all avoid paying tax if we could. Great. No police, no fire service, no doctors, no defence, no help when you get ill or unable to work, no trains, no water, no waste collection. Good luck with that selfish point of view.

  • rate this

    Comment number 1642.

    I agree with Crisbian. How can David Cameron beat on about linking tax and morals. Is inheritence tax a good moral approach to bunce the treasury after someone meets their fate?

    It's madness all thats happened is he's taken advanatage of tax loop hole. It's for the government to legislate and if they can't then those that take advantage of it are the moral winners.

  • rate this

    Comment number 1641.

    Kudos to Jimmy Carr.

    It struck me that anyone who talks about "minimising their tax returns", an innocent phrase in itself, are actually taking advantage of tax relief options that are not available for low and middle income earners.

    We are all required by our employers to maximise our tax returns by using PAYE.

    So minimising tax usually means tax avoidance. And people should recognise this.

  • rate this

    Comment number 1640.

    Another way of looking at it, If Mr Carr earned that money through ticket sales:
    The money was taxed when people earned the income required to pay for them.
    VAT payable on the tickets.
    Income tax payable on anything Mr Carr earned.

    Just how many times can the government tax the same money! We are taxed to oblivion in this country so it's not surprising that some will try to find ways around this.

  • rate this

    Comment number 1639.

    I consider it a moral obligation to pay as little tax as legally possible. I can spend it far better than the government can. If the government truly considers it "morally reprehensible" to do such things why is it even legal? Just another example of what the government says disconnecting with what the government does.

  • rate this

    Comment number 1638.

    The con of Limited companies being used to avoid income tax should be closed - this is not the founding principle of limited liability as there is no risk being taken and therefore no benefit to society at large. As other posters have said, tax dividends via PAYE and force all UK companies with an offshore holding company to reveal full accounting records or lose their limited status.

  • rate this

    Comment number 1637.

    Why did Cameron comment on Jimmy Carr when he refused to comment on Sir Philip Green.

  • rate this

    Comment number 1636.

    In 1972 the conservative Duncan Sandys - the chairman of Lonrho Company had 100,000 dollars tax free lodged into his Cayman Islands Account. Ted Heath (Prime minister) described the affair as showing " the unpleasant and unacceptable face of capitalism.


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